DWP giving compensation to Universal Credit claimants forced to repay money

Recoverable Hardship payments are emergency loans from the DWP to Universal Credit claimants whose benefits had been cut as a result of sanctions

A Department for Work and Pension (DWP) scheme which provides compensation payments to people who were wrongly forced to repay Hardship Loans has been extended.

Recoverable Hardship payments are emergency loans from the DWP to Universal Credit claimants whose benefits had been cut as a result of sanctions. Under the rules, you had to repay the full amount no matter what.

This meant the benefits department outright refused requests from individuals to waive or review the rate of repayments. However, in 2021, it was ruled that this was wrong, and a scheme was set up to compensate those who had been affected.

This week, the DWP extended this compensation scheme after it emerged that just one application had been successful since it was implemented. Overall, just three people applied. One claimant felt her payment was ignored and contacted solicitors to launch a judicial review. Osborne Law says this suggests that many others who were eligible may have missed out.

Osbornes Law represented the client who received a sanction from the DWP after they didn't comply with the Claimant Commitment for their Universal Credit. This claimant did not always attend her Job Centre appointments due to ill health.

Emma Vincent Miller, a public law specialist at Osbornes Law, said: "More than half of these sanctions were subsequently overturned, yet when she applied to the Hardship Payment Refund Scheme, her application was ignored until the eleventh hour when she was forced to involved solicitors. Despite having been repaid what she was owed, my client was determined to make sure that others were not ignored and so decided to bring a judicial review, which led to the DWP agreeing to re-run the scheme.”

If you think you have been impacted, you can ask DWP to review its decision not to stop the repayment of your Hardship Payment if all of the following apply:

• Between January, 1, 2014 and January, 11, 2021 you asked Universal Credit or DWP Debt Management to waive the repayment of a hardship payment, or reconsider the rate of recovery, and
• DWP refused your request or refused to consider the request

Alongside this, you will also need to show that either:

• You could not afford to repay the hardship payment at that time, or
• It had a significant effect at the time on your or your family’s health or wellbeing – this means that it caused a health condition or made a health condition worse

Osbornes Law says evidence can include things such as bank statements, information about loans or letters from creditors, and supporting statements from medical professionals. If you do not have this information, the group says it is still worth applying.

You can apply by filling in an application form, which you can get from the DWP's website here. You will then need to send this form to: Freepost DWP UNIVERSAL CREDIT FULL SERVICE. The deadline for applications is May 4 2025. For further information, call the Universal Credit Recoverable Hardship Payment scheme helpline on 0800 158 5557.